EBA is worried about some European banks: report

30th August 2011, Comments 0 comments

The European Banking Authority is worried that some European banks do not have enough capital, a situation highlighted by the International Monetary Fund as well, the Financial Times Deutschland said Tuesday.

EBA head Andrea Enria has written to the Ecofin council in Brussels to ask that the European Financial Stability Facility, set up to lend to troubled eurozone countries, give money directly to troubled banks to accelerate their recapitalisation, the newspaper said.

On Friday, IMF managing director Christine Lagarde called for an "urgent" recapitalisation of European banks so make them "sufficiently solid to face the risks represented by public debts and weak growth."

Her comments were poorly received by European leaders who defended the health of banking institutions.

"European banks are better capitalised than they were a year ago," something "confirmed" by banking stress tests carried out by the EBA in July, a spokesman for European Commissioner for economic affairs Olli Rehn said on Monday.

The head of the French financial markets watchdog AMF, Jean-Pierre Jouyet, nonetheless said Monday that "a certain number of European banks" should be recapitalised, though he added that they were not major banks.

© 2011 AFP

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